Chapter - 1

Question 1

An investment dealer operates as a/an ___ when it acts on behalf of a buyer or a seller of a security and does not itself own title to the securities at any time during the transactions

Answer 1

Agent

Question 2

An investment dealer or a duly registered individual that is registered to trade in securities in the capacity of an agent or principal and is a member of a Self-Regulatory Organization

Answer 2

Broker

Question 3

Financial markets where debt and equity securities trade. They include organized exchanges as well as private placement sources of debt and equity

Answer 3

Capital markets

Question 4

___ provides customers with physical and electronic facilities to deposit and withdraw depository-eligible securities and manage their related ledger positions (securities accounts). It also provides electronic clearing services both domestically and internationally, allowing customers to report, confirm and settle securities trade transactions

Answer 4

CDS (Clearing and Depository Services Inc.)

Question 5

The process of confirming and matching security trade details

Answer 5

Clearing

Question 6

Shares in ___ investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalization is fixed

Answer 6

Closed-end fund

Question 7

___ makes direct cash loans to consumers, who usually are unable to secure a loan from a bank. They typically charge a higher interest rate than banks

Answer 7

Consumer finance company

Question 8

Brokerage house that buys and sells securities for clients at a greater commission discount than full-service firms. Also known as ___

Answer 8

Discount broker, Self-directed brokers

Question 9

An institution such as a bank, life insurance company, credit union or mutual fund which receives cash, which it invests, from suppliers of capital

Answer 9

Financial intermediary

Question 10

___ companies that take advantage of computer technology to provide more efficient financial products and services

Answer 10

Fintech (Financial Technology)

Question 11

Policies implemented to separate and isolate persons within a firm who make investment decisions from persons within a firm who are privy to undisclosed material information which may influence those decisions. For example, there should be separate fax machines for research departments and sales departments

Answer 11

Firewall

Question 12

Investment dealer that serves institutional clients exclusively

Answer 12

Institutional firm

Question 13

Investment dealer that offers products and services that cover all aspects of the industry, including full participation in both the institutional and the retail markets

Answer 13

Integrated firm

Question 14

A person or company that engages in the business of trading in securities in the capacity of an agent or principal and is a member of IIROC

Answer 14

Investment dealer

Question 15

A fund or company that sells units or shares and invests the proceeds in a portfolio of securities. There are two principal types: closed-end and open-end or mutual fund. Shares in closed-end investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalization is fixed. Open-end funds sell their own new shares to investors, buy back their old shares, and are not listed. Open-end funds are so-called because their capitalization is not fixed; they normally issue more shares or units as people want them

Answer 15

Investment fund

Question 16

A member-based professional association that represents the interests of market participants

Answer 16

Investment Industry Association of Canada (IIAC)

Question 17

An investment fund operated by a company that uses the proceeds from shares and units sold to investors to invest in stocks, bonds, derivatives and other financial securities. They offer investors the advantages of diversification and professional management and are sold on a load or no-load basis. The shares/units are redeemable on demand at the fund’s current net asset value per share (NAVPS)

Answer 17

Mutual fund (Mutual funds are open end funds)

Question 18

Mutual funds are ___. There is no limit to the number of shares that they can issue

Answer 18

Open-end funds

Question 19

A ___ is a pool of assets managed with the goal of supplying its beneficiaries with income during their retirement years

Answer 19

Pension fund

Question 20

The issuance of securities in the primary market is called ___

Answer 20

Primary market distribution

Question 21

The person for whom a broker executes an order, or a dealer buying or selling for its own account. The term may also refer to a person’s capital or to the face amount of a bond

Answer 21

Principal

Question 22

___ are investment dealers that serve only retail clients. They include full-service firms and discount brokers. Full-service firms offer a wide variety of products and services for the retail investor. Discount brokers execute trades for retail clients at a reduced rate, but do not provide investment advice

Answer 22

Retail firms

Question 23

An online investment service that provides clients with automated investment advice

Answer 23

Robo-advisor

Question 24

___ purchases, at a discount, instalment sales contracts from retailers and dealers when such items as new cars and appliances are bought on instalment plans

Answer 24

Sales finance company

Question 25

A financial institution whose main role is to accept savings deposits and pay interest on those deposits. Usually set up by a government and is similar in function to a credit union

Answer 25

Savings bank

Question 26

Canadian-owned banks. The largest 6 banks in Canada out-distance the asset size of other Canadian-owned banks. These banks are regulated by the Bank Act

Answer 26

Schedule I bank

Question 27

Banks that are incorporated and operate in Canada as federally regulated foreign bank subsidiaries. These banks are regulated by the Bank Act

Answer 27

Schedule II bank

Question 28

Banks that are federally regulated foreign bank branches of foreign institutions that have been authorized under the Bank Act to do banking business in Canada

Answer 28

Schedule III bank

Question 29

___ offer discounted transaction costs and do not provide investment advice to investors. Also known as ___

Answer 29

Self-directed brokers, Discount brokers

Question 30

The moment of irrevocable exchange of cash and securities

Answer 30

Settlement